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LaSalle LOGIPORT REIT
1
Operational Highlights
2nd Fiscal Period Financial Results
Activities to Date and Future Management Policies
Logistics Market Outlook
3
6
10
19
Ⅰ.
Ⅱ.
Ⅲ.
Ⅳ.
Appendix 24 Ⅴ.
Table of Contents
Operational Highlights Ⅰ.
LaSalle LOGIPORT REIT
4
Operational Highlights 1/2
Acquisition of Logiport (“LP”) Kawagoe for 11.95bn yen (on 3/1/2017)
• Appraisal NOI Yield (1) 4.9 %
• AUM grows to ¥173.4bn
Securing preferential negotiating rights from other external third parties
• 4 properties in excess of ¥25bn
• All of the properties are under exclusivity and are prime logistics facilities located in the Tokyo or Osaka areas(2)
External Growth
Maintaining High Occupancies
• 2nd FP average occupancy was
97.5 %
• Occupancy as of 3/31/2017 was
98.1 %
(a 2.4% increase relative to IPO)
Portfolio level rent per tsubo increase
• Monthly rent per tsubo has increased
to ¥3,535 (+11 yen per tsubo increase from IPO)
• A rental gap of approximately
5.5 % remaining
Internal Growth
Steadily increasing the LTV(3) level • LP Kawagoe was acquired by raising
debt capital through a syndicate loan of 13.79bn yen
• LTV raised from 34.2% to 38.7%
• Debt capacity of approximately
¥20bn yen remaining (Assuming LTV up of 45%)
Diversification of debt channels • Issued investment corporation bonds
of ¥6bn(5yr & 10yr notes)
Prolonged・Fixed Rate・Diversified
• Avg. remaining term 5.9 years
• Fixed rate ratio 87.7 %
• Financial institutions 11 banks
Financial Strategy
(1) Calculated by dividing the appraisal NOI at the time of acquisition by the acquisition price (2) “Tokyo Area” defined as an area within 60km of JR Tokyo Station. “Osaka Area” is defined as an area within 45km from JR Osaka Station. (3) Interest bearing debts ÷ Total Assets
LaSalle LOGIPORT REIT
5
Operational Highlights 2/2
Assets Under Management (2) ¥173.4 bn
Occupancy Rate 98.1 %
Property Location Concentration Tokyo Area 100 %
Interest Bearing Debts ¥71.07 bn
LTV (3) 38.7 %
Debt Capacity Approx. ¥20.0 bn
Wtd. Avg. Interest Costs 0.59 %
Credit Rating(JCR) AA-
Summary of LLR(1) Increases in Forecast Stabilized DPU (yen) (4)
Actual and Forecast DPU (yen)
2,453 2,650
2,345 2,369
1,000
1,400
1,800
2,200
2,600
3,000
1st FP
Actual
2nd FP
Actual
3rd FP
Forecast (8)
4th FP
Forecast (8)
2,100 2,202 2,362
1,000
1,400
1,800
2,200
2,600
IPO Forecast 3rd FP (5)
1st FP Forecast
3rd FP (6)
Current forecast 3rd FP (7)
(1) As of 3/31/2017 (2) AUM is based on total acquisition price (3) Interest Bearing Debts ÷ Total Assets (4) DPU after temporary effects from property taxes and financing costs are adjusted
(5) 3rd FP forecast based on the business plan announced on 2/17/2016 (i.e. at IPO) (6) 3rd FP forecast based on the business plan announced on 10/18/2016 (7) 3rd FP forecast based on the business plan announced on 4/14/2017, while bringing forward and adjusting
for any temporary effects due to property taxes and financing costs (8) Announced on 4/14/2017
2 n d F i s c a l P e r i o d F i n a n c i a l R e s u l t s
Ⅱ.
LaSalle LOGIPORT REIT
7
Comparison and Analysis of Actual DPU and Forecast DPU
(1) Announced on 10/18/2016 (2) Announced on 4/14/2017
+62 +39
+4
-366 +234
-78
-95 +44 -20
Occupancy increases, increase in rent/tsubo
Reduction in utilities expenses
Other
4th FP Forecast 3rd FP Forecast 2nd FP Actual
¥2,545 ¥2,650
¥2,345 ¥2,369
Expensing property taxes for
the initial 8 IPO
properties
Acquisition of LP
Kawagoe
Financing cost increase
Leasing business cost increases and
other items
Reduction in financing
costs
Other
Previous DPU
Projection for 2nd
FP (1)
2nd FP DPU
Actual
3rd FP Forecast
(2)
4th FP Forecast
(2)
LaSalle LOGIPORT REIT
8
2nd FP Forecast (1)
(a)
2nd FP Actuals
(b)
Difference (b)-(a)
Operational Highlights (million yen)
Operating Revenues 4,800 4,853 +53
Operating Expenses 1,947 1,896 -51
Operating Income 2,853 2,956 +103
Ordinary Income 2,626 2,740 +114
Net Income 2,625 2,739 +114
Distributions Per Unit (yen)
Total Distributions Per Unit(DPU) 2,545 2,650 +105
DPU attributed to earnings(EPU) 2,386 2,491 +105
DPU in excess of earnings 159 159 -
Other Highlights (million yen)
NOI 4,152 4,263 +111
LTV (%) 34.3% 34.3% -
Total Assets 172,015 172,144 +129
Interest Bearing Debts 58,970 58,970 - (Note) The figures in parentheses above note the impact to DPU (Note) In the above, “+” indicates an increase in profit (distribution), “-” indicates
a decrease in profit (distribution)
2nd FP Financial Results (Ending 2/28/2017) Relative to Initial Forecasts
Increase in rental business income
Increase/Decrease in operating income
・Attributed to occupancy increase
+68 mm yen (+62 DPU)
・Attributed to reduction in utilities cost
+43 mm yen (+39 DPU)
Key factors of the difference between 2nd FP Actuals and Previous Forecast (1)
(1) Announced on 10/18/2016
LaSalle LOGIPORT REIT
2nd FP Actuals
(a)
3rd FP Forecast
(b)
Difference (b)-(a)
4th FP Forecast
Operational Highlights (million yen)
Operating Revenues 4,853 5,191 +338 5,120
Operating Expenses 1,896 2,492 +596 2,447
Operating Income 2,956 2,698 -257 2,672
Ordinary Income 2,740 2,393 -346 2,419
Net Income 2,739 2,392 -347 2,418
Distributions Per Unit (yen)
Total Distributions Per Unit(DPU) 2,650 2,345 -305 2,369
DPU attributed to earnings(EPU) 2,491 2,174 -317 2,198
DPU in excess of earnings 159 171 +12 171
Other Highlights (million yen)
NOI 4,263 4,034 -229 4,031
LTV (%) 34.3% 38.7% 4.4% 38.7%
Total Assets 172,144 183,820 +11,676 183,674
Interest Bearing Debts 58,970 71,070 +12,100 71,070
9
3rd FP(ending 8/31/2017)and 4th FP(ending 2/28/2018)Forecasts
(1) The figures in parentheses above note the impact to DPU In the above, “+” indicates an increase in profit (distribution), “-” indicates
a decrease in profit (distribution)
Increase in rental business income due to
acquisition of LP Kawagoe
・Rental Revenues:+338mm yen (+307 DPU)
・Rental Expenses: -81mm yen (-74 DPU)
・Rental Profits: +257mm yen (+234 DPU)
Expensing property taxes for initial 8 assets
-402 mm yen (-366 DPU)
Increase in operating costs, SG&A expenses
-157 mm yen (-143 DPU)
Decrease in asset management fees
+52 mm yen (+48 DPU)
Key factors for the difference between the 2nd FP and 3rd FP forecasts(1)
Increase in interest expense / loan related
expenses (including temporary expenses)
-86 mm yen (-78 DPU)
Activit ies To Date and Future M a n a g e m e n t P o l i c i e s
Ⅲ.
LaSalle LOGIPORT REIT
Manage a stabilized LTV (long term) in a range of 40-45%, and acquire additional properties with remaining available debt capacity
While we enter a period of significant new supply, LLR’s in-place leases are still below sustainable market rent levels
3 acquisition channels; LLR will acquire properties at appropriate timing
Disciplined and selective investment into prime logistics at a fair price
Future Management Strategies
External Growth Financial Strategy Internal Growth
Maintain high occupancy Utilization of debt capacity
New LaSalle Fund (Proceeding) (JLF 4 Fund)
External Acquisitions
Existing LaSalle Funds (JLF 3 Fund)
@4,000y/t
Spot rents(1)
@3,700y/t Sustainable
market rents (2)
@3,523y/t
In-place portfolio
level rents(3)
Approx.
20.0bn yen LTV45%
(1) New Development projects asking per tsubo rent levels (warehouse space only) (2) Warehouse market rents based on market reports which are relied upon for LRA’s underwritten levels. (3) In-place per tsubo rents are inclusive of LP Kawagoe (warehouse space only)
11
LaSalle LOGIPORT REIT
The Mid-Term Road Map Toward ¥300 billion of AUM
12 (Note) “LaSalle Funds” are real estate private funds that LaSalle establishes and manages
2020 thereafter Between 2017~2020 March 2017 IPO
8 properties
¥161.4 bn
¥300 bn
9 properties
¥173.4 bn
8 properties in development
(GFA total 420,000㎡)
Acquisition of LP Kawagoe
¥2,202
¥2,362
+10.0%
¥2,600
Existing LaSalle Fund
Third Parties
New LaSalle Fund (Proceeding)
+7.3%
Assuming LTV of 45% (¥20bn use of debt
capacity for acquisitions)
Illustrative Stabilized DPU Simulation
External Growth Develop above ¥40bn annually. Exclusivity granted to LLR.
Seed asset already acquired
Preferential negotiating rights secured for 4
properties in excess of ¥25bn
LaSalle LOGIPORT REIT
Transaction Highlights
External Growth Track Record:Case Study of Logiport Kawagoe
Opportunities for acquisition of lower occupancy properties
Pricing for property
Acquiring stabilized prime logistics properties at
a reasonable price
First phase of acquisition utilizing a bridge fund
Leasing efforts
• Remaining vacant space was left scattered, leaving an un-stabilized occupancy condition in-place for a prolonged period.
• Imminently, 1 tenant had submitted a termination notice, leaving the property faced with an even higher vacancy rate.
• Based on the leasing experience of the Sponsor, LLR was able to offer a price that appropriately evaluated the entailed risks.
• Other bidders seemed to shy away from the impending vacancy.
• In order to shield LLR from any leasing risk, LLR utilized an acquisition structure that entailed a bridge fund vehicle.
• With the sponsor’s support, the bridge fund was able to procure low cost capital for this warehousing phase of the acquisition.
• The bridge fund initially expected a lease up period of 9 months, however, it was able to lease up the remaining vacant units much earlier than anticipated.
Second phase of acquisition transferring asset to LLR
• LLR exercised its call option, and acquired LP Kawagoe at a price that kept bridge transaction costs to a minimum.
Selective investment in good deals
With over-heating competition for stabilized prime logistics, LLR is protecting the NOI yield level of the existing portfolio
Logiport Kawagoe
Acquisition Price ¥11.95bn
Appraisal Value ¥12.00bn
Appraisal NOI yield 4.9%
Occupancy 100%
• Acquired at a price that is a relative discount to “priced to perfection” stabilized properties that come to market.
• Passing vacancy risk issues to a bridge vehicle, LLR acquires asset only after 100% lease-up is achieved.
13
LaSalle LOGIPORT REIT
95.7% 95.7% 97.5% 97.3% 97.5% 97.3% 97.4% 97.8%
80%
85%
90%
95%
100%
IPO
2/28/2016
4/30/2016
6/30/2016
8/31/2016
10/31/2016
12/31/2016
2/28/2017
Internal Growth Track Record
Changes in occupancy
Increased from 95.7% at IPO to 97.8% at 2nd FP end
¥3,524 ¥3,531 ¥3,535
IPO 2/17/2016 1st FP 8/31/2016 2nd FP 2/28/2017
+¥4
Portfolio level avg. per-tsubo rents (1)
Increase of +11 yen from IPO and +4 yen from prior FP
Leasing track record
+¥7
(1) Per-tsubo rents are calculated factoring in the storage space only. (2) Increase/decrease in rates are relative to old contracts (only factoring the
warehouse part, temporary leases are excluded) (3) Percentage change relative to expected per tsubo price 14
LP Higashi Ogishima • 98% of standard lease contracts auto extended. • Vacant space had a average downtime of only 30 days. LP Hashimoto • Occupancy rose to 97.1% by 2nd FP end (representing a +5.0% increase relative to 1st FP end)
Beg of 2nd FP 9/1/2016
Rent / Unit (3)
+8.9%
End of 2nd FP 2/28/2017
Renewals / Auto Extensions
104,400㎡
22,700㎡
5,600㎡
Tenant replacement
(Vacated during the
2nd FP)
Rent / Unit (2)
+3.2% Rent / Unit (2)
-0.1%
New leases (Existing vacancy) 2nd FP
lease maturities
130,500㎡
Main activities
Occ. 97.5%
Occ. 97.8%
LaSalle LOGIPORT REIT
Sagawa Global Logistics, 6.6%
KDDI, 5.9%
Maruzen Showa Transportation, 5.7%
Nippon Logistics, 5.6%
Maruwa Transportation, 4.8%
SVD, 4.1%
Kusuhara Transportation, 3.3%
Sankyu, 3.2%
Toyo Mebius, 2.9% Maruni Storage, 2.8%
Other, 55.1%
17.3%
1.5% 1.0% 1.5% 1.6% 1.3% 0.7% 1.8% 3.9%
11.4%
14.6%
2.2%
7.1%
2.0% 5.5%
4.5% 2.8%
6.4%
12.8%
11.8%
6.3%
1.9% 1.2%
3.7%
1.6%
1.9%
3.4%
0
20
40
60
80
100
120
140
160
180
2nd FP2017/2
3rd FP2017/8
4th FP2018/2
5th FP2018/8
6th FP2019/2
7th FP2019/8
8th FP2020/2
9th FP2020/8
10th FP2021/2
11th FPthereafter
Hashimoto・Sagamihara Kita Kashiwa・Nagareyama A, B Higashi Ogishima A, B, C Kawagoe
(thousand ㎡)
During the next 8 FPs, Higashi Ogishima has 292,000㎡, Kita Kashiwa and Nagareyama have 177,000㎡, Hashimoto・Sagamihara・Kawagoe
have 110,000㎡, of lease maturities.
Lease Expiration Schedule and Tenant Diversification Status
(Note) Figures expressed above are accounting for a percentage of annual rent
Lease maturity / renewal periods
15
Tenant diversification(as a % of total NRA)
Top 5 tenants 28.6 %
Top 10 tenants
Total # of tenants 99
44.9 %
LaSalle LOGIPORT REIT
Asset Management Plan: Tasks and Efforts
16
Tasks Efforts
Higashi Ogishima
Minimize vacancy loss due to short term or temporary use needs
Manage rental increases attributed to tenant replacement and converting over standard leases into fixed term leases
Improvement of terms and conditions to standard leases
Average occupancy during the FP of 96.2% was achieved (relative to LLR’s 94.8% expected 2nd FP forecast, the actual result exceeded expectations by 1.4%)
98% automatic extensions among those tenants that are on standard lease terms
Downtime of only 30 days was achieved due to expanding tenants’ needs which took up any vacated space.
Succeeded in raising rents by 3% for those leases that were converted over from standard lease to fixed term lease.
Kita Kashiwa &
Nagare-yama
Reduction of rental gap (5-9%) upon lease maturity / lease renewal of fixed term leases
With the oncoming neighboring new supply, either consensually agree to terminate lease ahead of schedule or prolong the lease term upon renewing
Of the 15,829.06㎡ of leased space maturing, due to other tenants’ expansion needs, 100% of this space is under contract for absorption. Per-tsubo rent is to increase by 4.1%.
Hashi-moto, Sagami-hara, Kawagoe
Leasing up LP Hashimoto
Occupancy of LP Hashimoto increased from 90.1% at IPO to 97.1% by March end 2017.
The remaining space is already under contact and occupancy will increase to 99.9% by June 2017.
LP Sagamihara had 1 bay of space reach its lease maturity during 2nd FP. The space was re-leased at a +5% increase.
Due to Tenant A’s expanding business, grasp their growing space needs
Tenant B(770 tsubo) is asked to leave its space upon lease expiration, and go to Tenant A with expansion proposal
Proposed to extend the lease term for the existing space, along with expansion space
Internal Growth Case Study
Without waiting for the expiration of contracts Pre-emptive rent increases(+2.2%) Early agreement on prolonged lease term
(extended by 2 years) Prevent tenants with growing businesses
from vacating
Propose to raise rent/tsubo in exchange for capital investment for LED lighting
Contributing to the profitability and stability of the portfolio
Tenant A (Kita
Kashiwa)
NRA 6,264 tsubo
Lease Maturity 7/2020
Taking into account the increased space needs of key tenants, was able to extend out the lease term at higher rent levels
LaSalle LOGIPORT REIT
17
Financial Strategy: Optimization of Stability and Efficiency by Utilizing Acquisition Capacity
rial 1st FP 8/31/2016
After LP Kawagoe 3/1/2017
Debt Balance ¥58.97bn ¥71.07bn
(Inv. Corp. Bonds) 0 (¥6.0bn) LTV 34.2 % 38.7 %
Credit Rating(JCR) AA- AA- Avg. Remaining Term 5.9 yrs 5.9 yrs
Fixed Rate Debt Ratio 81.0 % 87.7 %
Wtd. Avg. Interest Rate 0.62 % 0.59 %
Number of lenders 7 11
BTMU 22.6%
Mizuho Bank 17.7%
SMBC 17.7%
SMTB 12.4%
DBJ 8.9%
Resona Bank 2.9% Fukuoka Bank 2.9%
Shinsei Bank 2.7%
Nomura Trust 0.7% 77 Bank 0.7%
MUFJ Trust Bank 2.4%
Investment Corporation
Bonds 8.4%
5.44
1.40 1.90
10.74
2.99
15.11 14.66
9.07
3.76 4.00 2.00 0
5
10
15
20
25
3rdFP
4thFP
5thFP
6thFP
7thFP
8thFP
9thFP
10thFP
11thFP
12thFP
13thFP
14thFP
15thFP
16thFP
17thFP
18thFP
19thFP
20thFP
21stFP
22ndFP
Floating Fixed Inv. Corp. Bonds
(bn yen)
36.4% 34.2% 34.3%
38.7%
30%
35%
40%
45%
50%
1st FP Interim3/31/2016
1st FP8/31/2016
2nd FP2/28/2017
After LP KawagoeAcq.
from 3/1/2017
Targeted stabilized LTV 40%~45%
20 bn of acq capacity remaining
Raising LTV
Mixing both longer duration and fixed rate debt at lower costs
• Investment corporate bond issuance, coupled with procurement of a syndicate loan for the acquisition of LP Kawagoe
• Prepayment of floating rate existing debt
LTV control • Raise LTV to a modest 38.7% with LP Kawagoe acquisition • Utilize reserve capacity for future external growth acquisitions
Diversification of lenders and repayment deadlines
¥71.07bn
LaSalle LOGIPORT REIT
Debt Procurement via Investment Corporation Bonds・Syndicate Loan
Acquisition of LP Kawagoe 3/1/2017 Refinance Feb. 2017 Capital Raising Plan
• Market trends, interest rate prospects
• The bonds were popular in the market; raised 6bn yen exceeding expectations.
• Procured a bridging loan of ¥1.69bn assuming debt refinanced upon acquisition of LP Kawagoe.
• Since IPO, 4 new lenders were invited into the bank syndicate, and a ¥13.79bn loan was procured.
• Bridge loan was extended out into 5-year debt.
• Avg. Remaining Term
5.9 yrs(+0.43yrs)
• Fixed Rate Ratio
87.7 %(+6.7%)
• # of Lenders
11 (+4 banks)
• Issuance of Investment
Corporation Bonds
¥6.0 bn
• Wtd. Avg. Debt Costs
0.59 %(-0.03%)
Prolong Term Fixed Rate
Refinanced ¥3.69bn during 2nd FP
Prepaid floating rate debt and lengthen out the term
Acquisition financing for LP Kawagoe
Inv Corp Bond (10yrs) ¥2.0bn
Bridge loan ¥1.69bn
Inv Corp Bond (5yrs) ¥4.0bn
Syndicate Loan ¥13.79bn
18
L o g i s t i c s M a r k e t O u t l o o k Ⅳ.
LaSalle LOGIPORT REIT
0%10%20%30%40%50%60%70%80%90%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Supply Demand Vacancy Vacancy (1yr after built)
20
• While new supply has been steadily absorbed by the market as a whole, the period required for leasing for some properties has been prolonged
• Possibility of gradual increase in vacancy rate, as significant supply comes to market (CBRE estimates that in 2018 vacancy will be 7%)
• The occupancy rate for developments that have been completed in 2016 was 53%. While this figure is lower than the 2013 level (81.2%), it is in line with the past 12-year’s average.
• Secondary vacancy, due to tenants being lured away to other new development projects, has not been witnessed for modern logistics facilities that are already stabilized.
Supply/Demand and Mid-term Projections (1)
Projection
(mm ㎡)
Source: CBRE
Tokyo Area Logistics Market
Change in occupancy rate for large-scale multi-tenanted facilities(2) at completion
(1) Logistics facilities with GFA greater than 5,000㎡ .
Source: CBRE (2) Multi-tenanted logistics facilities with GFA greater than 10,000 tsubo. (3) In 2010, there were too few examples of newly supplied product.
N/A(3)
2016 total vacancy
(all properties)
4.1 %
(yoy -0.3%)
2016 vacancy
(1yr after completion)
1.9 %
(yoy +1.0%)
LaSalle LOGIPORT REIT
• While development of road networks and newly zoned industrial
parks continue to push new developments outward from central Tokyo, some new emerging areas continue to struggle
Recent Supply/Demand Balance
21
Source: CBRE data which was compiled by LLR’s asset manager (1) Submarkets where the accumulation of existing stock is small (2) Logistics Facilities with GFA greater than 5,000㎡
Vacancy(2)(YE 2016) Supply/Demand Environment
0~5% Supply/Demand tight
5~10% Supply/Demand balanced
10~15% Concerns of Supply/Demand Softening
15%~ Supply/Demand weak
• In addition to the emerging areas that continue to be supplied (1) by new developments driven by the continued improvements made in road infrastructure, new supply is being developed within urbanization adjustment zoning where their district plans are being modified to accommodate logistics facilities use (in areas along the Joban-do / Route 16 submarkets) as well as older infill sites where large scale factories used to operate are being redeveloped into logistics (Inland Kanagawa).
• In recent years, the supply of emerging areas was mainly due to the progress of improved outer ring-road networks, however, going forward, the future supply will mainly be focused in traditional logistics submarket areas.
Future Supply Trend
Tokyo Area Submarket Vacancy Rates and Supply Outlook
LP Nagareyama A,B
LP Higashi Ogishima A,B,C
LP Hashimoto
LP Sagamihara
LP Kita Kashiwa
Joban-do/Ken-o-do
Tohoku-do/Route1
6
Inland Kanagawa
Kanagawa Bay
Kanetsu-do/Route16
Kanetsu-do/Ken-o-do
Gaikan-do
Tokyo Bay
Chiba Bay Inland Chiba
Tohoku-do/Ken-o-do
Hachioji Narita
Joban-do/Route 16
Existing stock as of 2016 end 2017 & 2018 projected supply
Population Density(people / ㎦)
0~5,000 5,001~10,000 10,001~
Airport Port
LP Kawagoe
LaSalle LOGIPORT REIT
0%
2%
4%
6%
8%
10%
12%
14%
16%
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Supply Demand Vacancy Vacancy (1yr after built)
0%10%20%30%40%50%60%70%80%90%
100%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
22
Supply/Demand and Mid-term Projections (1)
Projection
(mm ㎡)
Osaka Area Logistics Market
Change in occupancy rate for large scale multi-tenanted facilities(2) at completion
Source: CBRE (1) Logistics facilities with GFA greater than 5,000㎡ .
N/A(3) N/A(3) N/A(3)
• 1,150,000㎡ of new logistics is expected to be supplied to market during 2017. While demand of approximately 700,000 ㎡ is expected to be evoked (a historical high), it is also expected that vacancy will rise sharply.
• 2018 projected supply is expected to decrease to 2016 levels. Thus, vacancy is expected to steadily decline after this year.
2016 total vacancy
(all properties)
6.7 %
(yoy +4.5%)
2016 vacancy
(1yr after completion)
1.2 %
(yoy +0.4%)
Source: CBRE (2) Multi-tenanted logistics facilities with GFA greater than 10,000 tsubo. (3) In 2010, there were too few examples of newly supplied product.
LaSalle LOGIPORT REIT
23
Osaka Area Submarket Vacancy Rates and Supply Outlook
Shin Meishin
Kobe
Osaka Bay
South Osaka
• With respect to the significant new supply, tenants continue
to take a wait-and-see approach
• The disparity between operators’ operating capabilities and leasing strategies (including their capabilities to negotiate rent levels) continues to widen. However, on a submarket level basis, there is no significant strength/weakness difference being witnessed
Recent Supply/Demand Balance
• Supply volumes are expected to decline with 2017 being the peak year
• Significant undercutting rents (which in turn undermine market rents) is a concern for certain properties as they continue to struggle with leasing
Future Supply Trend
Source: CBRE data which was compiled by LLR’s asset manager (1) Logistics Facilities with GFA greater than 5,000㎡
Hokusetsu・East Osaka
Population Density(people / ㎦)
0~5,000 5,001~10,000 10,001~
Airport Port
Vacancy(1)(YE 2016) Supply/Demand Environment
0~5% Supply/Demand tight
5~10% Supply/Demand balanced
10~15% Concerns of Supply/Demand Softening
15%~ Supply/Demand weak
Existing stock as of 2016 end 2017 & 2018 projected supply
A p p e n d i x Ⅴ.
LaSalle LOGIPORT REIT
25
Focused investments of Prime Logistics located in Tokyo and Osaka 1
Utilizing the asset management abilities of the LaSalle Group 2
Capitalize upon the LaSalle Group’s capabilities as a leading global investment
manager with deep roots in core real estate investment Utilize the wealth of operational experience that LaSalle Japan has
Nurtured in logistics development and investment
The portfolio is comprised of large scale logistics concentrated in the Tokyo area In order to ensure a portfolio with superior mid- to long-term characteristics, there is focus and attention
given to location and building specifications which are the source of a given properties’ characteristics
Features of LaSalle LOGIPORT REIT
LaSalle LOGIPORT REIT
26
AUM ¥173.4 bn
9
Tokyo Area(1)
Investment Area Statistics
16.4% 21.7% 61.9% 100%
Tokyo Area(4) Tokyo Area Osaka Area(3) Other
LLR J-REIT Avg.(Logistics only)
Average GFA (3)
Avg. GFA
Portfolio Summary
# of properties
NOI Yield (2) 4.9 % 98.1 % Occ.(3)
100 %
35,456㎡
109,640㎡
J-REIT Avg.(Logistics J-REITs only)
LLR
Location of Properties
(1) “Tokyo Area” is defined as the area within a 60km radius from JR Tokyo station. (2) “NOI Yield” is defined as Appraisal NOI at acquisition divided by the acquisition price. (3) Occupancy is as of March 31, 2017. (4) “Tokyo Area and Osaka Area ratios” are defined as logistics properties acquired by J-REITs as
of 3/31/2017 and the ratio is their respective GFA’s relative to the total GFA.
The portfolio consists of large scale logistics facilities located in Tokyo
109,640 m2
Kita Kashiwa
Hashimoto
Tokyo Area Within a 60km radius from Tokyo Station
Chuo Expressway
JR Tokyo Station
Route 16 Joban Expressway
Tokyo Gaikan Expressway
Nagareyama A, B
Sagamihara
Higashi Ogishima A, B, C
Kawagoe Population Density(people / ㎦)
0~5,000 5,001~10,000 10,001~
Airport Port
LaSalle LOGIPORT REIT
Tokyo and Osaka (1)
Total > 80%
< 20% Other areas
Prospective investment ratio
ロジポート橋本 27
Tokyo and Osaka Areas are target markets Characteristics of “Prime Logistics”
Large scale
Suitable Sites
High Specs
Tokyo area Osaka area
(1)”Osaka Area” is defined as the area that’s within a 45km radius from JR Osaka station.
Investment policy guided by the long term competitiveness of a given property
① Effective ceiling heights are greater than 5.5m, floor loads can handle in excess of 1.5t/㎡, and column spacing is typically 10m x 10m.
② Large ramp ways for direct truck access to the upper floors or freight elevators with sufficient loading capacity
③ Designed with flexible spatial partitioning
④ Ample office/administrative space
⑤ High safety features with seismic isolation or resistance performance
① In general, GFA is greater than 16,500㎡
① Excellent access to high consumption areas (population agglomeration)
② Close proximity to highway nodes
③ Located in industrial use zoned areas that allow for 24 hour operations
④ Easy public transportation access in order to attract employees
Hashimoto Station
National Highway Route 16
LP Hashimoto
LaSalle LOGIPORT REIT
Core 75.3%
Value Add 20.6%
Opportunistic 4.1%
World leading real estate investment advisory firm
AUM
$58.0bn 17countries / 24offices
Over 700 employees
AUM by region AUM by Property type Asia
Pacific $6.7bn
RE securities $14.0bn
Retail $11.8bn
Logistics $7.1bn
RE Securities $14.0bn
Other $4.0bn
Residential $5.6bn
U.S. (including Canada & Mexico)
$17.1 bn
Office $15.5bn
Global Network Trusted by Investors
Core return investment strategies account for 75.3%
Consistently a recipient of several top industry awards as a leading global investment manager.
Global comprehensive real estate services firm (Parent company of LaSalle Investment Management)
Scale of Operations
Revenues(2016)
Approx. $5.8bn
80 countries
280 offices
77,000 employees
Global Network
AUM by investment strategy Europe
$20.7bn
323 institutions Investors from over 30
countries including SWFs, insurance companies, and
HNW individuals
Award examples 2013-2017 • MSCI European Property Investment
Awards
• Pensions Age Awards
• Property Week
• Professional Pensions UK Pensions
Awards
• FT PIPA Awards
• Pensions Age Awards
• IPD Property Investment Awards
• Euromoney’s Real Estate Poll
• Morningstar 2014 Fund of the Year
• International Fund Awards
(Note) The ratios above are calculated without RE securities AUM in the denominator.
LaSalle Group is a leader in real estate core investments
28
(Note) Above figures are as of 12/31/2016.
Approx. $4.6 bn (listed on the NYSE)
Market Cap
(Note) Above figures are as of 12/31/2016
LaSalle LOGIPORT REIT
No. 1 Developer of large scale logistics (of GFA >100,000㎡ in Tokyo) Development・Investment statistics(Cumulative Basis) (2)
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Investment (Left Axis)Development (Right Axis)
800
1,200
1,600
2,000
2,400TSE REIT Index (Right Index) GFA
(mm ㎡) (Pt)
Development, investment, and leasing track record of logistics properties in Japan
Robust experience in development, investment, and leasing(1)
0
100
200
300
400
500
600
700
800
900
LIM Firm A Firm B Firm C Firm D Firm E Firm F Firm G Firm G Firm I
Cumulative Acquisitions Approx.1.6mm m2
Cumulative Development(2) Approx.2.08mm m2
Large scale development share within Tokyo(3) Approx. 18%
Leasing Experience Approx. 2.24mm m2
LaSalle Group is a pioneering leader for the development of logistics facilities
Involved in 4 out of the top 10 largest logistics deals
Rank Property Name Developer GFA(㎡) Completed
1 A A 213,435 10/2015
2 LP Sagamihara LaSalle Investment Management (“LIM”) 200,046 8/2013
3 B A 198,000 9/2016
4 C B 189,742 9/2016
5 Ex LP Kawasaki LIM 160,218 1/2008
6 D B 157,721 6/2011
7 E B 155,931 8/2004
8 F C 149,339 3/2014
9 Ex LP Kashiwa LIM 148,453 6/2006
10 LP Hashimoto LIM 145,802 1/2015
(1) As of 9/30/2016 (2) Includes development pipeline (3) Source: CBRE. Developed by a private company in Tokyo, where total floor area exceeds GFA of
100,000㎡ of leasable space. (As of 12/31/2016)
Source: both of the above tables are CBRE (Note) The figures above aggregate data for properties completed by 12/31/2016.
(thousands of ㎡)
29
LaSalle LOGIPORT REIT
LP Sakai Nishi 116,074㎡
30
Development Acquisitions Establishment of a private equity development fund
Wakasu 25,052㎡
LP Hokkaido 19,041㎡
LP Island City Hakata
48,852㎡
LP Nagareyama A, B Buildings
161,771㎡
LP Kita Kashiwa
127,165㎡
Ichikawa Shiohama 66,297㎡
LP Osaka 135,822㎡
Sodegaura 50,963㎡
LP Kashiwa 148,453㎡
LP Kawasaki 160,218㎡
Hamura 42,870㎡
Hiroshima 9,795㎡
Nishiura 2 props
6,599㎡ + 18,282㎡
Daiei Kawasaki 69,064㎡
Logistics investment begins in
Japan
LaSalle Japan
Logistics Fund I
established
First inland multi-
tenanted logistics property
LaSalle Japan
Logistics Fund II
established
Japan’s first inland facility that
was in close proximity to a train station
LaSalle Japan Logistics Fund III
established
2003 2004 Sep 2004 2007 Apr 2011 2013
Apr 2014 Apr 2011 Jul 2009
Aug 2007 Feb 2005 Sep 2004
Sep 2004 Mar 2005 Mar 2007
Dec 2007 Aug 2006
Oct 2007 Mar 2008
Mar 2008
Tatsumi 18,161㎡
Jun 2010
LP Sagamihara 210,829㎡
Jul 2011
Atsugi 52,375㎡
Sep 2011
LP Hashimoto 156,609㎡
Oct 2012
LP Higashi Ogishima A, B, C
388,343㎡
Jul 2014
Fund function + developer function + investor function = development and investment on an ongoing basis for large scale
logistics facilities, regardless of the economic environment
LaSalle Group’s track record for developing logistics facilities in Japan
Jul 2003
Mar 2015
LP Osaka Taisho
122,099㎡
Sayama Hidaka Fulfillment
Center 23,757㎡
Feb 2015
LaSalle LOGIPORT REIT
Logistics focused real estate development fund
Managing non-stabilized properties
LaSalle LOGIPORT REIT
Managing stabilized properties
Real Estate Market
Stabilized Properties Development・Un-stabilized Properties
31
LLR is the flagship core vehicle for the LaSalle Group, where it acquires stabilized logistics facilities
8 properties (2) are scheduled for development within LaSalle’s logistics development fund (1)
Tokyo・Osaka Areas 100%
Avg. GFA 53,160㎡
Total GFA 425,280㎡
2017/2018 Scheduled for completion
8 properties
425,280㎡ Completed
2018 and thereafter LaSalle’s development fund plans to develop 40bn yen in additional logistics facilities each year from 2018 and
thereafter
(1) A “LaSalle Fund” is a fund that the LaSalle Group has established and operates (2) The images are renderings of what is assumed to be built, however, actual as-built construction may differ. Additionally, with respect to the properties mentioned above, as of April
18, 2017, LLR may not acquire all or any of the properties listed above.
Distinct role sharing within the LaSalle Group and Future Development Pipeline
Tokyo Area Osaka Area Within a 60km radius from Tokyo Station Within a 45km radius from Osaka Station
JR Tokyo Station JR Osaka Station
LaSalle LOGIPORT REIT
32
Commitment to sustainability
At the LaSalle Group, in addition to being a industry leader in promoting sustainability through various organizations, LaSalle has established an in-house Global Sustainability Committee, which is conscious of the challenges involved with environmental (E: environment), societal (S: social), governance (G: governance) ESG best practices and are incorporating these measures on a company wide basis.
LaSalle Group’s commitment Efforts made by LLR
The installation of solar panels and more efficient energy usage has been incorporated as environmentally friendly measures in the course of operating properties
DBJ Green Building certification achieved
Participated in GRESB Survey
ULI Greenprint: founding member The Urban Land Institute (“ULI”) is a U.S. non-profit organization that is involved in real estate. Through the ULI Greenprint Center for Building Performance, we are working to reduce energy consumption footprint related to development and operation of real estate properties.
Founding member of GRESB The Global Real Estate Sustainability Benchmark (“GRESB”) is an group organized by major pension funds and asset management companies around the world, promoting the evaluation and measurement of ESG performance of real estate globally.
Received CASBEE’s architectural evaluation certification
4 of LLR’s properties received Green Building certifications.
DBJ Green Building certification
Introduced independently by the Development Bank of Japan (“DBJ”), this certification is a comprehensive scoring model targeting real estate that demonstrates concern for the environment and society. Evaluation is ranked on a 5 scale.
Star rating:★★★★★ LP Hashimoto
Star rating:★★★★★ LP Sagamihara
Star rating:★★★★ LP Kita Kashiwa
Star rating:★★★ LP Nagareyama B
LLR participated in the 2016 fiscal year “GRESB real estate evaluation” survey which is conducted across real estate companies and funds.
This is a comprehensive evaluation which measures the environmental performance of buildings, energy saving and resource savings, load reduction and recycling measures taken are measured.
GRESB Real Estate Assessment CASBEE Architectural Evaluation
Signed onto the U.N. Principles for Responsible Investment (“PRI”) in July 2009
The PRI is an action principle that incorporates various environmental, social, and governance challenges into the investment process. The PRI was proposed by then secretary general Kofi Annan in 2006.
LaSalle LOGIPORT REIT
① GFA of 16,000 tsubo or more. Each floor boasts of a scale of more than 5,000 tsubo .
② Ceiling heights ranging 5.5m – 7.0m. Floor loading capacity of at least 1.5 t/sqm, and column-
to-column spacing of 11.3m × 9.7m.
③ Freight elevators with a loading capacity of 3.5 tons. Elevators throughout the facility.
④ Truck berths on both sides of the 1st floor. Able to accommodate maximum of 4 tenants.
⑤ 8 meter eave extending from the first floor truck berth. With 13 meter columns + 8 meter roof
eaves, the property can offer high efficiency cargo handling under heavy rain.
⑥ Ample office space with air conditioning available.
Suitable Locations
① Excellent access to areas of high consumption. Good access to Saitama and Tokyo, both of
which are large consumption areas. By using the Ken-O or Kan-etsu expressways, this location
offers great distribution coverage across the Tokyo Metropolitan Area
② Proximity to main arterial roads (nodal points). Close to National Route 16 and Route 254,
which are main roads within the Tokyo metropolitan area. Good access to other highways.
③ Zoning for industrial usage, allowing 24-hour logistics operations
④ Easy pedestrian access from public transportation, aiding in attracting and retaining employees.
Bus access from Kawagoe and Ageo stations are in walking distance. Frequent bus service
(over 100 round trips per weekday)
33
External Growth Track Record:Acquisition of Logiport Kawagoe
Large Scale・High Spec
LP Kita Kashiwa
LP Hashimoto
Tokyo Area 60km radius from JR Tokyo Station
LP Nagareyama A, B
LP Sagamihara
LP Higashi Ogishima A, B, C
LP Kawagoe
2/28/2017 LP Kawagoe 3/31/2017
Acquisition Price(Planned) ¥161.44 bn
+
¥11.95 bn ¥173.39 bn
NOI Yield 4.9 % 4.9 % 4.9 %
Occupancy Rate 97.5 % 100.0 % 97.7 %
# of Properties 8 1 9
Tokyo Area ratio (1) 100 % 100 % 100 %
(2) Tokyo Area is defined as within a 60km radius from JR Tokyo station
Practice solid acquisition strategies Suitable logistics sites Large scale・High spec Disciplined pricing
Leverage Sponsor Support Leasing Warehousing function
Population Density(people / ㎦)
0~5,000 5,001~10,000 10,001~
Airport Port
Chuo Expressway
JR Tokyo Station
Route 16 Joban Expressway
Tokyo Gaikan Expressway
LaSalle LOGIPORT REIT
34
Occupancy Track Record
No. Property Name Occupancy Rate
Number of tenants
WALE (Yrs.)
Fixed Term Lease Ratio 3/31/2016 8/31/2016 2/28/2017 3/31/2017 Change from
3/31/2016
Tokyo-1 LP Hashimoto 90.1% 92.1% 95.2% 97.1% +7.0 pt 15 4.8 100.0%
Tokyo-2 LP Sagamihara 97.9% 97.9% 99.6% 99.5% +1.6 pt 16 4.6 100.0%
Tokyo-3 LP Kita Kashiwa 100.0% 100.0% 100.0% 100.0% - 10 1.9 100.0%
Tokyo-4 LP Nagareyama A 100.0% 100.0% 100.0% 100.0% - 1 -(1) 100.0%
Tokyo-5 LP Nagareyama B 99.7% 99.7% 99.8% 99.8% +0.1 pt 8 3.1 100.0%
Tokyo-6 LP Higashi Ogishima A 95.5% 97.0% 97.1% 97.1% +1.6 pt 23 1.1 32.4%
Tokyo-7 LP Higashi Ogishima B 94.4% 94.4% 94.2% 94.2% -0.2 pt 15 0.8 33.5%
Tokyo-8 LP Higashi Ogishima C 95.2% 99.0% 97.7% 97.6% +2.4 pt 17 0.9 43.7%
Tokyo-9 LP Kawagoe - - - 100.0% - 4 4.2 100.0%
Portfolio Totals 96.5% 97.5% 97.8% 98.1% +1.6 pt 99(2) 2.6 76.3%
Occupancy Rates, Fixed term lease ratios, Lease contract weighted average lease expirations
(1) Not able to disclose due to not having received tenant approval. (2) If the same tenant is renting multiple properties, then that tenant is counted 1 time.
LaSalle LOGIPORT REIT
35
Investment Corporation Bonds ・ Syndicate Loan
(units:millions yen)
Changes in Interes t Bearing Debts by Tranche
Remaininig Yrs 0 9mths 1.5yrs 2.0yrs 2.5yrs 4.0yrs 5.0yrs 6.0yrs 6.5yrs 7.0yrs 8.0yrs 9.0yrs 10.0yrs Totals
1/31/2017 ① 3,690 0 0 7,540 0 10,740 0 15,110 0 9,060 9,070 3,760 0 58,970
Short Term・Inv. Corp Bonds 1,690 4,000 2,000 7,690
Repayment -3,690 -4,000 -7,690
2/28/2017 ② 0 1,690 0 3,540 0 10,740 4,000 15,110 0 9,060 9,070 3,760 2,000 58,970
Syndicate Loan 1,900 1,400 2,990 7,500 13,790
Repayment -1,690 -1,690
3/1/2017 ③ 0 0 1,900 3,540 1,400 10,740 6,990 15,110 7,500 9,060 9,070 3,760 2,000 71,070
(units:millions yen)
Changes in Debt Summary
1/31/2017①
Short Term DebtInv Corp Bonds
2/28/2017②
Difference②-① Syndicate Loan
3/1/2017③
Difference③-①
Short Term Borrowings 3,690 1,690 1,690 -2,000 0 -1,690
Long Term Borrowings 55,280 6,000 57,280 2,000 13,790 71,070 13,790
Total 58,970 7,690 58,970 0 13,790 71,070 12,100
LTV 34.2% 34.2% 0.0% 38.7% 4.5%
Wtd. Avg. Remaining Term 5.47yrs 5.37yrs 5.94yrs 0.47yrs 5.09yrs 5.90yrs 0.43yrs
Fixed Rate Ratio 81.0% 78.0% 91.1% 10.1% 62.0% 87.7% 6.7%
Wtd. Avg. Debt Costs 0.61% 0.32% 0.62% 0.01% 0.37% 0.59% -0.02%
# of Lenders 7 8 1 11 4
LaSalle LOGIPORT REIT
36
Property No. Property Name Location GFA Acq. Price Appraisal (1) Inv. Ratio Age NOI Yield(2) Occupancy PML # of tenants
(㎡) (¥ bn) (¥ bn) (%) (Yrs) (%) (%) (%) (tenants)
Tokyo-1 LP Kanagawa
145,801 21.2 22.4 12.2 2 4.6 97.1 1.3 15 Hashimoto(3)
Sagamihara-city
Tokyo-2 LP Kanagawa
200,045 23.0 24.8 13.3 4 4.8 99.5 0.5 16 Sagamihara(3)
Sagamihara-city
Tokyo-3 LP Chiba 104,302 25.3 27.5 14.6 4 4.7 100.0 0.9 10 Kita Kashiwa Kashiwa-city
Tokyo-4 LP Chiba 17,673 3.5 3.8 2.0 9 5.3 100.0 1.6 1 Nagareyama A Nagareyama-city
Tokyo-5 LP Chiba 133,414 26.6 27.9 15.3 9 4.9 99.8 2.3 8 Nagareyama B Nagareyama-city
Tokyo-6 LP Kanagawa 100,235 19.0 19.5 11.0 30 5.3 97.1 6.5 23 Higashi Ogishima A
Kawasaki-city
Tokyo-7 LP Kanagawa 117,546 19.1 21.3 11.0 26 6.0 94.2 6.2 15 Higashi Ogishima B
Kawasaki-city
Tokyo-8 LP Kanagawa 116,997 23.7 25.0 13.7 16 5.3 97.6 6.3 17 Higashi Ogishima C
Kawasaki-city
Tokyo-9 LP Kawagoe
Saitama Kawagoe-city 50,742 12.0 12.0 6.9 6 4.9 100.0 4.4 4
Totals / Averages 986,760 173.4 184.2 100.0 12 5.0 98.1 3.4 109
(1) Appraisal values are as of February 2017 (2) “NOI Yield” is the appraisal NOI divided by the acquisition price (3) Acquisition price and appraisal values for “LP Hashimoto” and “LP Sagamihara” are expressed in relative proportion to LLR’s ownership percentage of joint co-ownership interest.
The GFA shown is of the entire property.
Portfolio Overview
LaSalle LOGIPORT REIT
37
Property Name LP Hashimoto (2) LP Sagamihara (2) LP Kita Kashiwa LP Nagareyama A
Location 4-7 Oyama-cho, Midori-ku, Sagamihara City, Kanagawa Prefecture
3700-3 Dana, Chuo-ku, Sagamihara City, Kanagawa Prefecture
13-1 Matsugasaki Nitta, Kashiwa City, Chiba Prefecture
492 Minami, Nagareyama City, Chiba Prefecture
Nearest station / Interchange
Ken Oodo: Sagamihara IC and Sagamihara Aikawa IC
Ken Oodo: Sagamihara IC and Sagamihara Aikawa IC
JR Joban Line: Kitakashiwa 6 mins Joban Expressway Kashiwa IC Joban Expressway: Nagareyama IC
Purchase Price ¥21,200,000,000 ¥23,020,000,000 ¥25,300,000,000 ¥3,500,000,000
NOI Yield(1) 4.6% 4.8% 4.7% 5.3%
Construction Reinforced concrete Alloy plated sheet steel
Reinforced concrete Alloy plated sheet steel
Reinforced concrete Alloy plated sheet steel Alloy plated sheet steel
No. of floors 5 stories 5 stories 6 stories 5 stories
GFA 145,801.69㎡ 200,045.57㎡ 104,302.62㎡ 17,673.87㎡
Property Characteristics
In close proximity to the Route 16 major highway, while having excellent access to the Tokyo and Yokohama, two large consumption areas
Easy access to “Sagamihara IC” and “Sagamihara Aikawa IC” catering logistics across a broad area
Located within walking distance to “Hashimoto” which is a terminal station, the property is also facing commercial and residential properties making for a favorable employment environment
Equipped with a ramp way, the building is of a scale where the leasable area per floor is in excess of 23,000㎡, with high grade specifications coupled with seismic isolation performance
In close proximity to the Route 16 major highway, while having excellent access to the Tokyo and Yokohama, two large consumption areas
Easy access to “Sagamihara IC” and “Sagamihara Aikawa IC” catering logistics across a broad area
A vast residential area is in the near vicinity, allowing for excellent employment environment
GFA in excess of 200,000 ㎡, making this asset the largest in the Tokyo metropolitan area among large scale logistics facilities
Equipped with a ramp-way, the building has high grade specifications coupled with seismic isolation performance.
Kashiwa City is an integrated area for large delivery centers aimed at the Tokyo metropolitan area
Located in close proximity to major arterial highways No. 6 and No. 16, and is within 6km to the “Kashiwa IC” along the Joban Expressway, the property offers excellent transportation convenience as a delivery base
Located within 6 minutes to the “Kitakashiwa” station along the JR Joban Line, there is bus service throughout, as well as neighboring residential homes, creating a favorable employment environment
Equipped with a ramp way, the building has leasable area per floor of 18,000㎡, with high grade specifications
Due to its close proximity to the “Nagareyama IC” along the Joban Expressway, via the “Misato Jct”, connecting to the Metropolitan Expressway, the property has excellent access to the Tokyo Metropolitan Area
The property can make deliveries to a widespread area by utilizing its access to National Route 16
Building A is equipped with sufficient vertical conveying functions which are optimal toward tenants that are looking to address storage needs.
Major tenants KDDI Crooz, Inc.
KK SVD Maruwa Transportation Agency
Maruni Business Logistics Corporation KK Baroque Japan Limited Maruwa Transportation Agency
A
B
(1) “NOI Yield” is defined as appraisal NOI divided by the Purchase Price. (2) Acquisition price and appraisal value of LP Hashimoto and LP Sagamihara are in proportion to LLR’s ownership percentage of joint co-ownership interest. GFA is expressed in respect of the entire property.
Portfolio Summary 1/2
LaSalle LOGIPORT REIT
38
Property Name LP Nagareyama B LP Higashi Ogishima A
LP Higashi Ogishima B
LP Higashi Ogishima C LP Kawagoe
Location 66-1 Tani, Nagareyama City, Chiba Prefecture
18-2 Higashi Ogishima, Kawasaki-ku, Kawasaki City,
Kanagawa Prefecture
15 Higashi Ogishima, Kawasaki-ku, Kawasaki City,
Kanagawa Prefecture
19-2 Higashi Ogishima, Kawasaki-ku, Kawasaki City,
Kanagawa Prefecture
3-5-1 Yoshinodai, Kawagoe-city, Saitama
Nearest station / Interchange
Joban Expressway : Nagareyama IC Bayshore Route: Higashi Ogishima IC
Bayshore Route: Higashi Ogishima IC
Bayshore Route: Higashi Ogishima IC
Ken-o Expressway:Kawashima IC Kanetsu Expressway:Kawagoe IC
Purchase Price ¥26,600,000,000 ¥19,000,000,000 ¥19,120,000,000 ¥23,700,000,000 ¥11,950,000,000
NOI Yield(1) 4.8% 5.3% 5.9% 5.2% 4.9%
Construction Alloy plated sheet steel Reinforced concrete Deck roofing
Reinforced concrete Deck roofing
Reinforced concrete Deck roofing
Reinforced concrete ・ steel framed alloy plated steel sheet
No. of floors 5 stories 10 stories (warehouse 5 stories)
10 stories (warehouse 5 stories) 6 stories 4 stories
GFA 133,414.76㎡ 100,235.67㎡ 117,546.26㎡ 116,997.14㎡ 50,742.47㎡
Property Characteristics
Due to its close proximity to the “Nagareyama IC” along the Joban Expressway, via the “Misato JCT”, connecting to the Metropolitan Expressway, the property has excellent access to the Tokyo Metropolitan Area
The property can make deliveries to a widespread area by utilizing its access to National Route 16
Building B has a GFA in excess of 130,000㎡, where it is equipped with high grade specifications
Proximity to major transportation infrastructure including the Metropolitan Expressway Bayshore Route “Higashi Ogishima IC”, Yokohama Port, Tokyo Port, and Haneda
Airport Proximity to major consumption areas such as the Tokyo Metropolitan Area, Kawasaki City, and Yokohama
City The surrounding area has several industrial and logistics facilities and is characterized as a large industrial
agglomerated area In 2018 the Kawasaki Port Harbor Road Higashi Ogishima Mizue Town Line is slated to open The property is of large scale and is equipped with a ramp way, along with high grade specifications
Excellent access to areas of high consumption. Good access to Saitama and Tokyo, both of which are large consumption areas. By using the Ken-o or Kanetsu expressways, this location offers great distribution coverage across the Tokyo Metropolitan Area
Proximity to main arterial roads (nodal points). Close to National Route 16 Highway and Route 254, which are main roads within the Tokyo metropolitan area. Good access to other highways.
Easy pedestrian access from public transportation. Truck berths are installed on both sides of the first floor,
ensuring delivery convenience, and providing versatile building specifications
Major Tenants Nippon Logitech K.K. Nippon Paper Crecia K.K.
Toyo Mebius K.K. Fuji Shoko Corporation
Sagawa Global Logistics K.K.
Maruzen Showa Transportation K.K.
Sagawa Global Logistics KK Sankyu Inc.
Nippon Express Co., Ltd. Keiyo Distribution Warehouse Co., Ltd.
C A
B
A
B
(1) “NOI Yield” is defined as appraisal NOI divided by the Purchase Price.
Portfolio Summary 2/2
LaSalle LOGIPORT REIT
Daily Products 23%
Food & Beverage
16%
Apparel 15%
Electronics 12%
E Commerce 9%
Pharmaceuticals
2%
Others 16%
LP Hashimoto, 11.4%
LP Sagamihara, 13.6%
LP Kita Kashiwa, 14.1%
LP Nagareyama A, B, 16.3%
LP Higashi Ogishima A,
11.5%
LP Higashi Ogishima B,
11.9%
LP Higashi Ogishima C,
14.3%
LP Kawagoe, 6.8%
Annual Rent (%) per property End Tenant User Industry Categories(2)
Consumption Oriented Logistics 93 %
Creation of stable cash flows by portfolio diversification and consumption oriented logistics tenants
(Note) The figures above are as of 3/31/2017 (1) Calculated based on leased area (2) Calculated based on an annualized rent basis
39
Features of LLR’s portfolio
LaSalle LOGIPORT REIT
173 213
385
447
76
259 233
0
500
LLR REIT A REIT B REIT C REIT D Logi REITs AA-
4.9%
3.5% 3.9%
3.4% 3.1%
3.8% 3.7%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
LLR REIT A REIT B REIT C REIT D Logi REITs AA-
Dividend Yield(1)
P/NAV
AUM(Acq. Price basis)
LTV(6)(Book Value basis)
(Reference)J-REIT Valuations
(¥ bn)
(3) (4)
1.03x 1.08x
1.30x 1.30x 1.20x 1.18x
1.11x
0.0x
0.2x
0.4x
0.6x
0.8x
1.0x
1.2x
1.4x
LLR REIT A REIT B REIT C REIT D Logi REITs AA-
38.7% 34.2%
48.7%
38.4%
24.5%
36.9%
43.7%
0%
10%
20%
30%
40%
50%
60%
LLR REIT A REIT B REIT C REIT D Logi REITs AA-
40
Current Assumption
(2)
4.5%
(4) Wtd. Avg. of J-REIT (excluding LLR) that obtained a AA- rating from JCR as of 3/31/2017.(same above) (5) Calculated based the 2nd FP Net Asset Value and investment unit price as of 4/17/2017. (6) Based on the most recent financial results disclosure materials
(1) Dividend yield is calculated by doubling the following terms projected DPU. (2) Calculated based on 3rd term forecast distribution announced on 4/18/2017. Unit price is as of 4/17/2017. (3) Wtd. Avg. of 4 logistics REITs(same above)
(Note) Created from disclosure materials of each company and stock price as of 3/31/2017.
2nd FP Actual (5)
0.99x
LaSalle LOGIPORT REIT
LP Higashi-Ogishima A, B, C are located in a suitable site for large scale, high functional “Prime Logistics”
Property Close Up: Features of LP Higashi Ogishima 1/3
41
Tokyo Station and CBD
Haneda airport
Higashi Ogishima A, B, C
Kawasaki Port tunnel
Higashi Ogishima harbor road No. 5 (scheduled for opening in 2024)
Tokyo Port
Shutoko Expressway
Bayside Route
Bus station
Suitable Site
Higashi Ogishima Inter-Change
① Access to consumption areas
Good access to a major consumption area - Tokyo CBD, Yokohama, and Kawasaki
② Proximity to main arterial roads (nodes)
Adjacent to the Shutoko Expressway entry/exit, with easy access to logistics hubs such as Haneda airport,
Tokyo port, and Yokohama port
③ Zoned for 24 hour operations and industrial use
Factories and logistics facilities comprise this large aggregated area for industrial use, enabling 24 hour
operations
④ Pedestrian access to/from public transportation
Adjacent to bus station (1 min) which connects to Kawasaki and Yokohama stations, frequent bus service
(weekdays in excess of 120 roundtrips)
Large scale
① GFA in excess of 30,000 tsubo, NRA per floor is in excess of 5,000 tsubo
High functionality
① Ceiling heights from 5.5m to 5.8m, floor load is 1.66t/㎡, column spacing is greater than 10m
② Equipped with double ramp-ways, allowing for direct truck access onto each floor
③ Enabled with flexible partitioning, from a minimum of 200 tsubo
④ Ensured with adequate office space with air conditioning
⑤ Built out of reinforced concrete for high seismic performance
Bldg A
Central driveway A&B: 10m C: 12m
Rampway (down)
Ceiling Height A&B: 5.5m C: 5.8m
Rampway (up)
LaSalle LOGIPORT REIT
38% 26%
9%
35% 42%
34%
10% 8%
28%
18% 24% 29%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
A Bldg B Bldg C Bldg
3 yrs or less
3 yrs or more
5 yrs or more
10 yrs or more
42
Property Close Up: Features of LP Higashi Ogishima 2/3
Occupancy・Rent Unit Price differential
• Avg. Rents have gone up by 2.2% over the past 3 years
Avg. period of occupancy for existing tenants
• Because the number of leases that are under standard terms are great,
the average WALE is 1.7 years.
• Among the existing tenants, their avg. occupancy has lasted 6.9 years
(Counting from the first lease start date through the 2nd FP)
0%
20%
40%
60%
80%
100%
2013年9月 2017年2月 95
98
100
103
105
Rental Index (Sep 2013 = 100) Occupancy
Avg. Occ. 94.8%
(Note) Occ. based on area
Breakdown of length of occupancy
(Note) Based on leased area
(Note) The percentages shown above are accounting for the roughly 119,000㎡ of space which came upon their lease maturities during the 2nd FP. (Temporary usage is not accounted for, and only the warehouse/storage use areas are considered).
Built upon a track record of stable operations, per tsubo rents have steadily increased
Lease renewal status for 2nd FP
• Standard leases that get cancelled are converted into fixed term leases at higher mark-to-
market rent levels Standard Lease
63% Fixed Term Lease
37%
Auto Renewal 62%
New Lease 15%
Renewal 21%
Same Rent Level 62%
Increase 8%
Same 22%
Vacancy 2%
Vacancy 2%
Reduction 6%
LaSalle LOGIPORT REIT
Property Close Up: Features of LP Higashi Ogishima 3/3
2% 0% 2% 2%
19%
7%
-20%
-10%
0%
10%
20%
A Bldg B Bldg C Bldg
Fixed Term LeaseRent Gap
Standard Lease RentGap
Rent gap
Total industries
Tenant・Shippers Configuration
• Due to flexible compartmentalization of space, tenants range from small
to large sizes
• As large scale tenants have received deposits of goods from multiple
shippers (i.e. end users), actual tenant dispersion is even greater
30 社
Tenant dispersion based on actual end users
Tenant dispersion based upon industries
Top 5 Firms 65.8 %
Total # of companies 59 社
Top 5 firms 39.3 %
68% 68% 56%
33% 32% 44%
0%
25%
50%
75%
100%
A Bldg B Bldg C Bldg
FixedTermLeaseStandardLease
Fixed term lease ・standard term lease ratios
Current rent levels
• In-place rents are below market by 5%~20%
• As the rent gap is relatively large for those tenants under standard terms,
the motivation to move is poor, thus, while their contracted lease terms are
short, the actual period of occupancy has been over a long period of time.
Due to dispersion of tenants・shippers, and below market rents, occupancy is stabilized (downside protected)
Undervalued relative to inplace rents
Overvalued relative to inplace rents
43
(Note) Relative to total portfolio lease area (Warehouse area only)
LaSalle LOGIPORT REIT
44
Features of “Prime Logistics”
Large Scale Ramp Way, etc. Enables truck access to the upper floors, or there are vertical conveyors with sufficient loading capacity.
Flexible space partitioning Designed with contact car berths, vertical conveyor layouts, fire prevention compartmentalization.
Office space Ample office space
Seismic Isolation / Earthquake resistance Lateral and vertical motion dampeners
LOGIPORT Sagamihara
High End Specifications Effective ceiling heights, floor loading, and column spacing to enhance storage efficiency and work productivity.
Approx. 5.5m
Approx. 10m
Environmental, energy efficiency
Solar panels for renewable energy utilization
Exterior walls sandwich panel system for thermal insulation and airtightness.
Automatic lighting sensors for corridors and bathrooms
Obtained S and A rankings, based on CASBEE, for new and existing built, respectively
Security Measures Amenity Enhancements
Convenience store for employees
Operation of a commuter bus from the nearest train station
24 hour, 365 day, fire prevention center
Cafeteria space for employees during breaks
LaSalle LOGIPORT REIT
Logistics Market Overview
45
5.8
8.3
10.7
13.8 14.1 13.0
15.3
02468
1012141618
2016 2017 2018 2019 2020 2021 2022
1,001 1,124
1,306 1,275 1,272 1,461
1,784 1,879 2,039
2,249 2,481
0
500
1,000
1,500
2,000
2,500
3,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
78.6 89.6
100.3 111.3
122.5 134.1
5.9% 6.7%
7.5% 8.2%
9.0% 9.7%
0%
2%
4%
6%
8%
10%
12%
0
40
80
120
160
200
240
2014 2015 2016 2017 2018 2019
E commerce Sales (left axis) % of EC (right axis)
Expansion prospects of the E-commerce market
Expansion changes in the 3PL market
Source:CBRE
Logistics properties facing a rebuilding period
Source:eMarketer Source:Based on the MLIT’s “Construction Starts Statistical Survey” ※For buildings, the useful life assumes 50 years, described the total floor area of warehouse that tabulates the useful life in each year
($ bns)
(bn yen)
(millions of ㎡)
LaSalle LOGIPORT REIT
46
(Units:JPY thousands)
LP Kita Kashiwa LP Higashi Ogishima A LP Higashi Ogishima B LP Higashi Ogishima C
Real Estate Leasing Business 754,619 598,645 627,687 754,714 Rental Revenues 677,271 546,619 557,273 690,729
Other Revenues 77,348 52,026 70,413 63,985
Real Estate Operating Expenses 201,987 132,308 142,554 186,357 Outsourcing Costs 30,440 56,905 46,270 48,938
Utilities 54,398 14,707 23,879 33,454
Insurance Premiums 1,369 1,256 1,577 1,668
Repair & Maintenance 22,777 6,434 2,540 14,007
Depreciation Expense 90,079 51,259 66,989 86,804
Other Leasing Expenses 2,922 1,746 1,298 1,483 Real Estate Leasing Business Income 552,631 466,337 485,132 568,357 Net Operating Income 642,711 517,596 552,121 655,162
2nd FP(9/1/2016-2/28/2017)
(Note) Since consent for disclosure from an end tenant (1 company) of LP Nagareyama A building has not been obtained, each of the line items have been combined with LP Nagareyama B building.
Property by Property Profit & Loss
LP Hashimoto LP Sagamihara LP Nagareyama A LP Nagareyama B
Real Estate Leasing Business 556,238 720,913 840,200 Rental Revenues 519,177 648,672 772,134
Other Revenues 37,060 72,241 68,065
Real Estate Operating Expenses 124,567 144,960 239,845 Outsourcing Costs 19,512 32,290 30,735
Utilities 26,295 32,558 47,079
Insurance Premiums 966 1,149 1,848
Repair & Maintenance 242 1,523 10,873
Depreciation Expense 74,668 67,483 145,967
Other Leasing Expenses 2,882 9,954 3,340
Real Estate Leasing Business Income 431,670 575,953 67,571 532,783 Net Operating Income 506,339 643,436 89,306 657,016
LaSalle LOGIPORT REIT
47
Item 1st FP 8/31/2016
2nd FP 2/28/2017
Operating Revenues 5,130 4,853
Rental Revenues 4,687 4,411 Other Leasing Business Revenues 442 441
Operating Expenses 1,958 1,896 Expenses Related to Rental Business 1,282 1,172 Asset Management Fees 600 633 Asset Custody・Administrative Fees 25 23 Directors’ Compensation 6 3
Independent Auditor Fees - 10 Other Operating Expenses 43 53
Operating Income 3,171 2,956 Non-operating Income 8 0
Interest Income Receivables 0 0 Interest on Refund 7 0
Non-operating Expenses 680 216 Interest Expenses 204 179
Interest on Investment Corporation Bonds - 0
Amortization of Deferred Establishment Expenses 6 3
Amortization of Investment Corporate Bonds Issuance Costs - 0
Investment Unit Issuance Expenses 9 -
Offering Costs Associated with Issuance of Investment Units 322 -
Financing Related Expenses 132 31 Other 5 -
Ordinary Income 2,498 2,740 Net Income Before Income Taxes 2,498 2,740 Net Income 2,496 2,739 Prior Period Profit Carried Forward - 0 Net Income Available for Distributions 2,496 2,740
(Units:millions yen)
Current Liabilities 6,182 4,079 Operating Accounts Payable 103 115
Short Term Borrowings 3,690 1,690
Accounts Payables 1,085 738
Consumption Taxes Payable 158 100
Advances Received 815 820
Other Current Liabilities 329 614
Non-current Liabilities 57,425 59,163 Investment Corporate Bonds - 6,000
Long Term Borrowings 55,280 51,280
Security Deposits held in Trust 2,145 1,883
Total Liabilities 63,607 63,242 Net Assets 108,860 108,901
Unitholders’ Capital 106,363 106,161
Surplus Capital 2,496 2,740
Total Net Assets 108,860 108,901 Total Liabilities and Net Assets 172,468 172,144
Income Statements Balance Sheets (Units:millions yen)
Income Statements and Balance Sheets
Item 1st FP 8/31/2016
2nd FP 2/28/2017
Current Assets 8,659 8,808 Cash & Deposits 4,244 4,538 Cash & Deposits in Trust 4,266 4,075 Other Current Assets 148 193
Non-current Assets 163,779 163,271 Tangible Fixed Assets 163,442 162,917 Investments and Other Assets 337 354
Deferred Assets 29 64 Establishment Costs 29 26 Investment Corporate Bonds issuance costs - 38
Total Assets 172,468 172,144
LaSalle LOGIPORT REIT
48
Type Lender OPB Interest Rate Origination Repayment(3) Notes
Long Term
BTMU
3,540 Base Interest Rate (JBA 1-mth JPY TIBOR) + 0.25%(1)
2/17/2017 2/18/2019 Unsecured
Non-guaranteed
Mizuho Bank
SMBC
SMTB
Resona Bank
Fukuoka Bank
Long Term
Mizuho Bank
6,120 0.41%(2) 2/17/2016 2/17/2021 Unsecured
Non-guaranteed
SMBC
SMTB
Resona Bank
Fukuoka Bank
Long Term
Mizuho Bank
9,220 0.68%(2) 2/17/2016 2/17/2023 Unsecured
Non-guaranteed
SMBC
SMTB
Long Term
Mizuho Bank
6,190 0.76%(2) 2/17/2016 2/19/2024 Unsecured
Non-guaranteed
SMBC
SMTB
(Units: millions yen) List of Borrowings(as of 3/1/2017)
(1) With respect to the Japanese Bankers Association (“JBA”) Japanese Yen TIBOR, please refer to the JBA TIBOR operating agency website(http://www.jbatibor.or.jp) (2) For those loans with variable interest rates, we have entered into interest rate swap transactions in order to avoid any interest rate fluctuations risk. Thus, the interest rate shown takes into consideration the effect of the interest rate swap (i.e. a
fixed interest rate) (3) If the repayment of principal and interest falls on a non business day, then repayment shall be on the next business day. Should this day fall into the following month, then the repayment date shall be the immediately preceding business day.
Short Term & Long Term Borrowings Summary
Long Term
Mizuho Bank
4,910 0.89%(2) 2/17/2016 2/17/2025 Unsecured
Non-guaranteed
SMBC
SMTB
Long Term
Mizuho Bank
2,250 0.93%(2) 2/17/2016 2/17/2026 Unsecured
Non-guarantee
d
SMBC
SMTB
Long Term BTMU 1,540 0.42%
(Fixed Rate) 2/17/2016 2/17/2021 Unsecured
Non-guaranteed
Long Term DBJ 3,080 0.42%
(Fixed Rate) 2/17/2016 2/17/2021 Unsecured
Non-guaranteed
Long Term BTMU 3,170 0.68%
(Fixed Rate) 2/17/2016 2/17/2023 Unsecured
Non-guaranteed
Long Term DBJ 2,720 0.68%
(Fixed Rate) 2/17/2016 2/17/2023 Unsecured
Non-guaranteed
Long Term BTMU 2,870 0.79%
(Fixed Rate) 2/17/2016 2/17/2024 Unsecured
Non-guaranteed
Long Term BTMU 4,160 0.89%
(Fixed Rate) 2/17/2016 2/17/2025 Unsecured
Non-guaranteed
Long Term BTMU 1,510 0.98%
(Fixed Rate) 2/17/2016 2/17/2026 Unsecured
Non-guaranteed
Long Term
Resona Bank
1,900 Base Interest Rate (JBA 3-mth JPY TIBOR) + 0.1625% (1)
3/1/2017 9/3/2018 Unsecured
Non-guaranteed
Fukuoka Bank
Shinsei Bank
77 Bank
Nomura Trust Bank
Long Term
Resona Bank
1,400 Base Interest Rate (JBA 3-mth JPY TIBOR) + 0.1875% (1)
3/1/2017 9/2/2019 Unsecured
Non-guaranteed
Fukuoka Bank
Shinsei Bank
77 Bank
Nomura Trust Bank
Long Term
DBJ
2,990 0.43% (Fixed Rate) 3/1/2017 3/1/2022
Unsecured Non-
guaranteed
Resona Bank
Fukuoka Bank
MUFJ Trust Bank
Long Term SMBC 1,900
Base Interest Rate (JBA 3-mth JPY TIBOR) + 0.3325% (1)
3/1/2017 9/1/2023 Unsecured
Non-guaranteed
Long Term
MUFJ Trust Bank
5,600 0.47% (Fixed Rate) 3/1/2017 9/1/2023
Unsecured Non-
guaranteed Mizuho Bank
SMTB
Type Lender OPB Interest Rate Origination Repayment(3) Notes
LaSalle LOGIPORT REIT
Retail investors
95.1% (10,975)
Domestic Financials
0.8% (106)
Domestic Corporates
2.4% (286)
Foreign Institutions
1.4% (172)
Retail Investors
16.9% (186,399)
Domestic Financials
43.6% (480,088)
Domestic Corporates
4.6% (51,058)
Foreign Institutions
34.7% (382,455)
Retail Investors
13.1% (144,854)
Domestic Financials
52.2% (574,288)
Domestic Corporates
4.1% (45,923)
Foreign Institutions 30.4%
(334,935)
Domestic retail investors Domestic financial institutions (incl. securities firms) Other domestic corporates Foreign institutions (incl. 46,200 units held by Sponsor)
By # of Investors By # of Units Held By # of Units Held
(Total # of investors:11,539) (Total # of Investment Units: 1,110,00)
(Total # of Investment Units: 1,110,00)
(Total # Investors:13,650)
Retail investors
95.3% (13,015)
Domestic Corporates
2.6% (366)
Domestic Financials
0.7% (105)
Foreign Institutions
1.2% (164)
49
Ownership by Investor Type
Major Unitholders
Unitholders Summary
# of units % of total
Japan Trustee Services Bank, Ltd. (Trust Account) 169,503 15.40% Trust & Custody Services Bank, Ltd.(Securities Investment Trust Account) 97,035 8.82%
Japan Master Trust Bank (Trust) 83,007 7.54%
NSI CUSTOMER SECURED 30.7. OMNIBUS ※ 46,200 4.20%
Nomura Bank (Luxembourg) S.A. 41,541 3.77%
Nomura Trust Bank (Trust) 41,107 3.73%
The Bank of New York, Non-treaty JASDEC account 24,574 2.23%
MSIP client securities 16,277 1.47%
BNYML – Non-treaty account 16,254 1.47%
SIX SIS LTD. 15,192 1.38%
Totals 550,690 50.06%
※The number of outstanding shares currently held by Jones Lang LaSalle Co-Investment, Inc. (The asset manager of LaSalle LOGIPORT REIT, LaSalle REIT Advisor KK’s, parent company is LaSalle Investment Management KK (“LIM KK”). LIM KK’s parent company is Jones Lang LaSalle Global Holdings B.V., and 50% of the outstanding shares of this holding company entity is held by Jones Lang LaSalle Co-Investment Inc.). As shown in the right hand table, the 46,200 units are actually held by Jones Lang LaSalle Co-Investment Inc.
As of 2/28/2017 As of 8/31/2016
# of units % of total
Japan Trustee Services Bank, Ltd. (Trust Account) 225,809 20.52% Trust & Custody Services Bank, Ltd.(Securities Investment Trust Account) 104,597 9.50%
Japan Master Trust Bank (Trust) 97,315 8.84%
Nomura Trust Bank (Trust) 50,393 4.58%
NSI CUSTOMER SECURED 30.7. OMNIBUS ※ 46,200 4.20%
State Street Bank and Trust Company 505012 25,598 2.32%
The Bank of New York Mellon SA/NV 10 20,903 1.90%
Nomura Bank (Luxembourg) S.A. 19,950 1.81%
SIX SIS LTD. 14,149 1.28%
State Street Bank and Trust Company 505001 12,863 1.16%
Totals 617,777 56.16%
By # of Investors
LaSalle LOGIPORT REIT
50
Optimal Cash Management
Cash management policy implementation Sample illustration of cash management due to implementation of excess profit distribution
Repayment of Interest Bearing Debts
Construction of robust financial structure
FFO FFO- CapEx
(AFFO)
Cash Distributed to Unitholders
FFO Breakdown
CapEx
Cash uses for items other
than distributions
Depreciation Expense
Net Income
Distributions Attributed to
Profit Sharing
Excess Profit Distributions
New Property Acquisitions
Strengthening growth potential
Utilize towards repairs or Capital Expenditure
Maintain and strengthen the competitiveness of owned properties
Excess Profit Distribution (Return of Capital)
Goal(vs. Depreciation Expense) Continual excess profit distributions…30% Continual excess profit distributions
+ one time excess profit distributions…40%
(1) The diagram above is for illustration purposes only. The amount of distributions in excess of LLR’s retained earnings which LLR ultimately makes is subject to change.
LaSalle LOGIPORT REIT
51
Management fees which fluctuates with unitholders’ value Decision making flow chart of Asset Manager as it relates to related party deals
Drafting by the Investment & Management Division
Approval by the Compliance Officer
Deliberation and Resolution of the Compliance Committee
Investment Director brings up for discussion to the Investment Committee about plan
Deliberation and Resolution of the Investment Committee
Deliberation and Resolution of the Board of Directors
Direction of either discontinuation or content change
Attendance and approval from external committee officer is a resolution prerequisite
Direction of either discontinuation or content change
Approval of the Investment Corporation Board of Directors
Management Fee Components of Asset Manager
(1) AM Fee I (tied to AUM): Prior Fiscal Period Total Assets × 0.22%(Upper Limit rate) (2) AM Fee II (tied to ordinary income): (Prior Fiscal Period Ordinary Income+Depreciation Expense+Deferred Assets Amortization-Transfer Gains or Losses
on Specified Assets-Valuation Gains or Losses) × 5.8% (Upper Limit Rate)
(3)(AM Fee I+AM Fee II)× Adjusted EPU × 0.026% (Upper Limit rate)
With respect to the decision making involving related party transactions, approval from the external officer in the Compliance Committee and external officer in the Investment Committee must be obtained, and in addition, approval from the Investment Corporation’s Board of Directors must be obtained as a prerequisite.
Approx. 4% of the outstanding investment units are held by the LaSalle Group and JLL, demonstrating alignment of
interest
Attendance and approval from external committee
member is a resolution prerequisite
Recurring Management Fees
(4) Sale Price × 1.0% (Upper Limit rate) in case of acquisition or transfer of real estate related assets
Acquisition / Transfer Fees
(5) New merger or absorption merger opposite party real estate related appraised value × 1.0%(Upper Limit Rate)
Merger Fee
Alignment of interest between unitholders and LaSalle Group
Governance Structure Emphasizing Unitholders’ Interests and Transparency
LaSalle LOGIPORT REIT
Structure Diagram of Investment Corporation
Overview of Asset Management Company
Company Name LaSalle REIT Advisors K.K.
Paid in Capital ¥164,500,000
Shareholder LaSalle Investment Management K.K. (100%)
President and CEO Toshimitsu Fujiwara
Registrations and Licensing, etc.
Realty Business Governor of Tokyo (1) No. 97862 Trading discretionary proxy MLIT approved No. 92 Financial Instruments Business Director of the Kanto Local Financial Bureau No. 2863
Unitholders Registry and Administrative Agreement
General Office Agreement Asset Custody Agreement 1
Asset Management Agreement 3
Sponsor Support Agreement 4
5 Trademark License Memorandum
Investment Corporation LaSalle LOGIPORT REIT
General Meeting of Unitholders
Committee
Operating Officer:Toshimitsu Fujiwara
Supervisory Director:Kentaro Shibata
Supervisory Director:Koshi Nishiuchi
Accounting Auditor PwC Aarata Auditing Firm
Asset Manager LaSalle REIT Advisors K.K.
Sponsor/ Parent Company of the
Asset Manager LaSalle Investment Management K.K.
Asset Custody Company General Office Trustee
Unitholders Registry Administrator
Mitsui Sumitomo Trust and Banking Company
1 3
5
4
LaSalle LOGIPORT REIT’s Structure
General Administrative Trustee of Investment Corporation
Bonds
Bank of Tokyo- Mitsubishi UFJ, Ltd.
2 General administrative trustee on investment corporation bonds
2
52
Disclaimer
This document, which has been prepared solely for information purposes, should not be construed or considered for the purpose of recruitment, solicitation, or sales of the particular investment product in question. In this document, there is information about LaSalle LOGIPORT REIT (hereinafter the “Investment Corporation” or “LLR”) which are based off of charts and data provided by third parties that were utilized by LaSalle REIT Advisors K.K. (hereinafter the “Asset Management Company” or “LRA”). In addition, there is analyses, judgments, and other opinions expressed by the Asset Management Company that draw from these data. Given that the content of this document is unaudited, there are no guarantees provided with respect to its accuracy or reliability. In addition, please understand in advance, that with respect to the Asset Management Company’s analyses and judgment, these views merely reflect current opinions, and may change or discontinue without notice. With respect to the data, indicators, etc. published by third parties, neither the Investment Corporation nor the Asset Management Company will assume any responsibility for their accuracy (inclusive of data that is based on real estate appraisal reports). The contents of this document contains forward looking statements regarding future projections and performance. These statements are future performance metrics of the Investment Corporation, however, they do not guarantee financial conditions. The Asset Management Company is a financial instruments firm based on the Financial Instruments and Exchange Act.